22 April 1999: US-based producer of paints, stains, glass and chemicals, PPG Industries Inc., said first-quarter earnings fell 34% to US$ 143 million before charges, but the profits beat consensus est…
22 April 1999: US-based producer of paints, stains, glass and chemicals, PPG Industries Inc., said first-quarter earnings fell 34% to US$ 143 million before charges, but the profits beat consensus estimates due to record sales in its coatings business. After US$ 20 million in restructuring charges, related to the costs of integrating recent packaging coatings acquisitions, PPG, North America“s largest producer of flat glass, reported a net profit of US$ 123 million for the quarter, or US$ 0.70 a share. The company said that it had an operating profit of US$ 0.81 per share, down from the US$ 1.07 per share, or US$ 192 million, recorded in the same period a year earlier, but ahead of expectations. Wall Street analysts“ consensus estimate for the quarter was US$ 0.78 per share, according to earnings forecast firm First Call Corp. “Annual cost savings from the workforce reductions will offset their one-time cost,” PPG Chairman and Chief Executive Raymond LeBoeuf said in a statement. Investors pushed PPG shares nearly 9% higher after the report in morning activity to US$ 58.75, up US$ 4.81. Just ahead of noon, PPG was the eighth highest net-gaining issue on the New York Stock Exchange. First-quarter sales fell to US$ 1.80 billion from US$ 1.91 billion in last year“s comparable quarter, despite record first-quarter coatings segment sales stemming from volume contributions of recent acquisitions. “The US economy continues to perform well, with strong auto sales and housing starts,” LeBoeuf added. “However, North America and Europe“s basic manufacturing sectors are experiencing deflationary pressures, with margins squeezed by declining prices.” Furthermore, negative trends that began last year, associated with the troubled economies of Asia and now Brazil, persisted through the first quarter, the company said. “We are addressing this environment with aggressive actions intended to grow earnings more quickly and consistently for the long term,” LeBoeuf said, “including strategic acquisitions, new-product introductions, further manufacturing efficiency improvements and other cost-reduction actions.”